17.3. Improve Your Accounting Savvy

Financial statements — the income statement, balance sheet, and statement of cash flows — are the hard core of a financial report. To make sense of financial statements, you need at least a rudimentary understanding of financial statement accounting. You don't have to be a CPA, but the accountants who prepare financial statements presume that you are familiar with accounting terminology and financial reporting practices. If you're an accounting illiterate, the financial statements probably look like a Sudoku puzzle. There's no way around this demand on financial report readers. After all, accounting is the language of business. (Now where have I heard that before?)

The solution? Read this book. And when you're done, consider reading another book or two about reading financial reports and analyzing financial statements. If you need a suggestion, check out another of my books, How To Read A Financial Report, 6th edition (Wiley).